In the original RFA (Gene Expression Studies in Arthritis and Musculoskeletal and Skin Diseases), funded in 2003, gene expression studies were conducted in adult articular chondrocytes, sets of co-regulated genes were established and these genes were computationally analyzed for co-regulatory motifs. Arising from this proposal was the discovery of a new transcriptional pathway involved in chondrocyte metabolism: the pathway leading to the generation of the transcription factors steroid regulatory element binding proteins (SREBPs). In this grant renewal proposal, we describe plans to focus our work on this pathway, studying the phenotype generated by tissue-specific knock out of the enzyme Site-1 Protease, an enzyme necessary for activation of SREBPs. Mutation of Site-1 protease or knock-out of the gene results in a severe chondrodysplasia with no endochondral bone formation. Our results point to the possibility that Site-1 protease, in addition to its function in the SREBP pathway, may have a function in chondrogenesis that is independent of its ability to activate the transcription factor. These studies provide an entirely new direction in cartilage research and have the potential to impact both the transcriptional regulation of cartilage genes, the formation of endochondral bone and articular cartilage repair. Therefore, SPECIFIC AIM 1 is designed to investigate the role of Site-1 protease in chondrogenesis and in maintenance of the chondrocyte phenotype in vivo while SPECIFIC AIM 2 is designed to pursue the mechanism of this phenotype on a molecular basis in vitro. Cartilage-specific knock out mice have been made that have severe chondrodysplasia and no endochondral bone formation. Studies will be undertaken to determine the mechanism of the defect by analysis of this cartilage-specific knockout and other knock-out phenotypes, including more focused knock out in the growth plate and an inducible knock out system. In vitro studies will include organ culture of whole tibias, analysis of biosynthetic mechanisms of the cells and analysis of the extracellular matrix of the cartilage.